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Business Valuations

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Are you in need of a business valuation?

There are a number of reasons why you may need a business valuation in Australia. These include:

  • Selling an enterprise (preparing for sale)
  • Buying an enterprise (due diligence to assist in working out a 'fair price')
  • Partnership Dissolution
  • Shareholder buyout
  • Family Law matters

When we value an enterprise, we value add as part of the process to determine where improvements can be made by outlining and explaining why certain types of businesses are worth more than others.

You could say we are doing a business health check at the same time, identifying opportunities to increase profitability and its value, which will definitely benefit you in the long run, explained in more detail below.

As business valuers, we have also acted as Expert Witnesses for businesses involved with a compulsory acquisition by government bodies and have provided advice to clients as to whether the value is in line with what has been offered prior to it being accepted. Our costs are covered by the compulsory acquirers (as outlined in the legislation).

For more information on the process, please go to http://www.valuergeneral.nsw.gov.au/compulsory_acquisitions/compulsory_acquisition_process

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Methods Used

In a perfect world there would be only one valuation method which could then be easily determined so that an informed group of people with the same information could come up with the same value conclusion. However, unfortunately this is not the case. The valuation methodologies are usually determined by reference to:

  • The assets held by the entity; or
  • The earnings of the entity; or
  • The revenue stream of the entity; or
  • A combination of the above

The most common methods are:

1
Capitalisation of Future Maintainable Earnings Method – good for businesses that have a good history of profitability, are mature, have stable revenue streams and where reasonable certainty of future earnings exists.
2
Discounted Cash Flow Method – focuses on businesses that have future cash flows that are being purchased (locked in forward revenue streams e.g. innovation or technology businesses).
3
Net Asset Backing Method – value of the enterprise is the sum of net tangible assets where there is little or no goodwill (or a return on goodwill is uncertain), used where the break up value is likely to exceed the going concern position.
4
Cost to Create Method – for businesses that are new (start ups), micro businesses, loss making or those with no intangible value and limited tangible assets.
5
Rule of Thumb or Industry Method – used the accepted industry or multiplier model consistently reflected in the market, common for franchises, industry sectors with large numbers of participants.

Benefits of Valuing Your
Enterprise Now!

Do you really know what your business is worth right now? Business owners often have a lack of understanding as to what their business is really worth, as you’re spending most of your time actually running the business and keeping the wheels turning! Most of the time this aspect is overlooked until it is desperately needed. There are a number of reasons why business valuation services may be required.

If you are buying or selling you will need to determine its value prior to negotiating on price. This means that you are working out whether you are paying a fair price if you are buying or ensuring you are getting a reasonable price when you sell.

Would you prefer to:

1
Do nothing, hope it gets better and then hope for a lucky sale ; or
Contact Us
2
Understand how your business will be valued, analyse what areas need to be improved and make changes now, experience better cash flow and profits and then sell for a much higher price?
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What Our Clients Say

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Scolari Comerford is innovative when it comes to a holistic business point of view, not just compliance. They continually look for opportunities to improve our business for the long term. Scolari Comerford provides excellent customer service and I fully recommend them to other businesses.
TONI ALDERDICE, OWNER
Midwest Foods, Dubbo
Michael Kovacs, Founder and Director
I really enjoy working with the team at Scolari Comerford. They are always fast to respond and have made a big difference to my business.
Michael Kovacs, Founder and Director
Kachink Communications, Sydney
Kate Hurst
What I value most about Scolari Comerford is their integrity, I value dealing with people who are honest. I also value their personal interest with us over the years and how prompt they are to attend to all of our needs.
Kate Hurst
Dennis Hurst Radiators & Exhaust, Nyngan
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